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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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What would the CGT position be in the following circumstances: Property

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What would the CGT position be in the following circumstances:
Property jointly owned from July 2000, full purchase price 240,000, lived in until July 2003 (PPR). From August 2003 it was occupied by the other joint owner (grandmother) until her death in June 2006. From July 2006 the other 50% was passed to me by a deed of novation. The value at that time estimated to be approx £480,000 and the property was rented out and declared in my tax return.
The property is now up for sale with a value nof £1,350,000. I can calculate the CGT with just one owner but do not know how to deal with the gains where two owners were involved for the first six years?

For CGT purposes, your cost is the sum of half the purchase price in July 2000 (£120,000) and half the probate value in June 2006 (240,000). So, the cost is £360,000.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Thank you, ***** ***** calculated the CGT to be £171,344 (28%) am I in the right ball park?

Ownership 170 months

PPR Relief 37 months plus final 18 months

Letting relief capped at £40,000

Sale proceeds £1,350,000 less cost £360,000 leaves gain of £990,000 - PPR relief and last 18 months relief £320,294 - £40,000 letting relief - annual CGT exemption £11,000 leaves a taxable gain of £618,706.

CGT at 28% £173,238 assuming all the gain is taxable at 28%

CGT at 18% on £31,865 £5,736 plus at 28% on £586,841 at 28% £164,315, total £170,051

The second calculation assumes you have no taxable income.

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